Optimal funding coverage in a mixed oligopoly with quality competition and price regulation

Detalhes bibliográficos
Autor(a) principal: Ghandour, Ziad
Data de Publicação: 2022
Outros Autores: Straume, Odd Rune
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: https://hdl.handle.net/1822/77375
Resumo: We study the optimal design of a public funding scheme in a mixed oligopoly setting (with applications to health care and education) with one welfare-maximising public provider and two profit-maximising private providers, where all providers compete on quality and where providers included in the public funding scheme are subject to price regulation. We find that the first-best solution cannot be implemented without including (at least) one of the private providers in the public funding scheme. However, inclusion of only one of the private providers is sufficient to induce the first-best outcome. Such inclusion allows for the elimination of a negative competition externality between the private providers that, all else equal, yields underprovision of quality.
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spelling Optimal funding coverage in a mixed oligopoly with quality competition and price regulationCompetitionMixed oligopolyPublic fundingQualitySocial SciencesWe study the optimal design of a public funding scheme in a mixed oligopoly setting (with applications to health care and education) with one welfare-maximising public provider and two profit-maximising private providers, where all providers compete on quality and where providers included in the public funding scheme are subject to price regulation. We find that the first-best solution cannot be implemented without including (at least) one of the private providers in the public funding scheme. However, inclusion of only one of the private providers is sufficient to induce the first-best outcome. Such inclusion allows for the elimination of a negative competition externality between the private providers that, all else equal, yields underprovision of quality.We thank three anonymous referees for valuable comments and suggestions. This paper is financed by National Funds of the FCT-Portuguese Foundation for Science and Technology within the project UID/ECO/03182/2019. Ziad Ghandour also acknowledges support from FCT through the PhD Studentship SFRH/BD/144210/2019SpringerUniversidade do MinhoGhandour, ZiadStraume, Odd Rune20222022-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/1822/77375engGhandour, Z., Straume, O.R. Optimal funding coverage in a mixed oligopoly with quality competition and price regulation. J Econ (2022). https://doi.org/10.1007/s00712-022-00778-80931-86581617-713410.1007/s00712-022-00778-8https://link.springer.com/article/10.1007/s00712-022-00778-8info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-01-06T01:23:13Zoai:repositorium.sdum.uminho.pt:1822/77375Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T19:06:55.153099Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
title Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
spellingShingle Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
Ghandour, Ziad
Competition
Mixed oligopoly
Public funding
Quality
Social Sciences
title_short Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
title_full Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
title_fullStr Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
title_full_unstemmed Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
title_sort Optimal funding coverage in a mixed oligopoly with quality competition and price regulation
author Ghandour, Ziad
author_facet Ghandour, Ziad
Straume, Odd Rune
author_role author
author2 Straume, Odd Rune
author2_role author
dc.contributor.none.fl_str_mv Universidade do Minho
dc.contributor.author.fl_str_mv Ghandour, Ziad
Straume, Odd Rune
dc.subject.por.fl_str_mv Competition
Mixed oligopoly
Public funding
Quality
Social Sciences
topic Competition
Mixed oligopoly
Public funding
Quality
Social Sciences
description We study the optimal design of a public funding scheme in a mixed oligopoly setting (with applications to health care and education) with one welfare-maximising public provider and two profit-maximising private providers, where all providers compete on quality and where providers included in the public funding scheme are subject to price regulation. We find that the first-best solution cannot be implemented without including (at least) one of the private providers in the public funding scheme. However, inclusion of only one of the private providers is sufficient to induce the first-best outcome. Such inclusion allows for the elimination of a negative competition externality between the private providers that, all else equal, yields underprovision of quality.
publishDate 2022
dc.date.none.fl_str_mv 2022
2022-01-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://hdl.handle.net/1822/77375
url https://hdl.handle.net/1822/77375
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Ghandour, Z., Straume, O.R. Optimal funding coverage in a mixed oligopoly with quality competition and price regulation. J Econ (2022). https://doi.org/10.1007/s00712-022-00778-8
0931-8658
1617-7134
10.1007/s00712-022-00778-8
https://link.springer.com/article/10.1007/s00712-022-00778-8
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Springer
publisher.none.fl_str_mv Springer
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
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reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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